Techdirt Threatened With Defamation Suit Over Story On Feds Getting Royalty In Movie From Mexican Drug Cartel Money Launderer

from the the-sequel dept

We recently wrote about a very strange case, in which the US government apparently ended up with a 10% royalty in a soon to be produced Hollywood movie that is being billed as the "prequel" to Passion of the Christ -- the famous Mel Gibson movie that made over $600 million. The details were convoluted, but apparently our reporting on the subject upset someone, as we were sent an email, claiming that our post was defamatory and could cause damages in "the hundreds of millions of dollars," threatening that legal action would be taken if we did not change the post immediately.

In case you missed the original story, it involved a guy by the name of Jorge Vazquez Sanchez, who everyone seems to admit was somehow connected to a Mexican drug cartel. The government specifically charged him with money laundering and extortion. Reporters covering the story, including Guillermo Contreras and Jason Buch at the San Antonio Express-News, refer to Vazquez as a "drug trafficker."

Either way, the extortion claim came from the way he took ownership of a screenplay for Mary, Mother of Christ, which was written by Benedict Fitzgerald, who also wrote the screenplay for Passion.... Fitzgerald, at some point, took out and then defaulted on a business loan for $340,000 with Macri Inc. Because of this, the owner of Macri Inc., Arturo Madrigal, took possession of the screenplay. Some time after this, apparently Vazquez had Madrigal's brother kidnapped in Mexico, and demanded the rights to the screenplay in exchange for his release. Madrigal signed over the rights to the screenplay to Vazquez. Vazquez apparently then was able to sell the screenplay to Proud Mary Entertainment, which was later renamed Aloe Entertainment, in exchange for $1 million (less some fees) and a 10% royalty rate on any profits from the movie. After Vazquez did a plea deal in which he plead guilty and handed over that 10% royalty to the US government, Madrigal hit Vazquez with a separate lawsuit, seeking to regain control of the screenplay that Vazquez had obtained through these questionable means.

As far as we can tell all of the above are undisputed facts. It's what has been reported by others. It's what's in the legal documents. And it's what we reported. Our report focused almost entirely on the oddity of the US government ending up with a 10% royalty interest in a Hollywood movie.

And yet... we received a very threatening email claiming that our post was defamatory. The full email (complete with a series of typos, though minus the odd line breaks) is posted below. The lawyer who sent it claims to represent the producers of the film who purchased the screenplay from Vazquez. This may mean Aloe Entertainment, though the email never names the client. Oddly, the email, while insisting that our post was defamatory, more or less repeats the identical facts as we described them in the original post, and which we are reiterating here. The email does appear to raise two issues:

Our original post referred to Vazquez as a "drug smuggler." This was based on the San Antonio Express-News report that refers to him as a "drug trafficker." Perhaps there is a difference between one and the other, but it does not seem to be one of significance. Either way, the threat email was quite upset that we did not specify that he was merely "acting as a money launderer for a Mexican drug cartel." I will admit that I do not see how this makes a major difference one way or another, but in the interest of accuracy in reporting, we have changed our original reference from "Mexican drug smuggler" to now say "money launderer for a Mexican drug cartel" -- which is how both the federal prosecutors and the lawyer sending the email appear to describe him. Considering that the lawyer claims to represent the production company, however, I still am at a loss as to how this matters. I do not believe our original statement in any way defamed the production company. It was a mere use of a synonym for the original report. But that should only concern Vazquez. It makes no mention of Aloe Entertainment nor any statement about that company.

The threat email says that the headline of our post "implies that the film has drug money in it" and suggests that "the film or its production has drug ties." Except we never said that. We did not state it. We did not imply it. We said nothing of the sort. We explained the same chain of events that we explained above, which noted that the production house bought the screenplay from Vazquez. Nowhere did we suggest that drug money went the other way. So, we were left somewhat baffled by the threat.

Either way, as we often do, we feel that it is reasonable and important to publicize legal threats against us. We sent an email reply to the lawyer in question, noting our general confusion about what he was complaining about, while also noting the small editing change we made for factual accuracy entirely unrelated to his client. I still do not know why the original threat email was sent, as the facts about the client that were stated in the threat email are no different than what we reported. I do wonder how much the producers of the film pay their lawyers to send out such threat emails, but I imagine that is a separate issue for them to deal with on their own.----

May 15, 2012

EDITOR

techdirt

Re: Mary. Mother of Christ

Dear Editor:

I represent the producers of the motion picture, “Mary, Mother of
Christ” This is in response to the article which you published today
which suggested that a drug smuggler was involved wth the "Mary, Mother of Christ" Movie Project.The title of the article is demonstrably false, misleading and libelous. Unless this article is taken down immediately and a
retraction is published immediately then it is the intention of my
client.to sue and your reporter. The true facts are set
forth below and the damages to my client if this is not corrected
immediately could run into the hundreds of millions of dollars.This is
because these falsehoods and malicious misrepresentations could cause
the film to lose its finacinmg and therefore its profits

If you look at the unsealed affidavit in the government prosecution they do not allege that Sanchez was a drug smuggles. Rather they say he was not smuggliong drugs but rather waqs acting as a money launderer for a Mexican drug cartel. Nowhere in the government prosecution, nor anywhere else, has it been alleged that there was drug money in the film project.

The true facts are as follows: of the two men that sold the screenplay to
us, Mauricio Sanchez Garcia and Jorge Vazquez Sanchez, from Macri, which
had acquired it by foreclosing on a lien with its original author, Benedict Fitzgerald, (the author of the Passion of the Christ), one of them, Jorge Vazquez Sanchez, had acquired his interest through extortionate acts.

This allegedly took place sometime after a company known as Macri lent
money to Mr. Fitzgerald and his partner in 2006, and Macri had
foreclosed on their lien on the screenplay in 2008, when Sanchez and
Vazquez forced a third man, Arturo Madrigal, to give them his
partial interest in the screenplay rights, which was collateral for the
loan. They therefore owned the project for a very short period of
time in 2008, perhaps a few months, before selling it to our company.
They do not have and they never had any role whatsoever in producing
the film.

Obviously, we had no knowledge at the time that these men were
involved in illegal activities or that they had acquired their
interest through extortion. And there is no allegation that
the money which was originally lent to Fitzgerald and his partner, was
money obtained from illegal activities or narcotics. In fact, if it
was Madrigal who had lent the money to Fitzgerald, as is alleged by
the government, and then had his interest in Macri extorted from him,
then the money in question would be wholly unrelated to any
allegations of money laundering in the Federal prosecution.

The article and the headline are therefore false and libelous in many respects.
The headline itself is false, libelous and needs to be retracted
immediately. The headline implies that
the film has drug mopney in it and that he was a drug smuggler. This is outrageous and false and is an allegation that the government has not ever made.

This too is false and libelous. The film has not been produced yet, and the allegation is that the men who extorted an owner of the company that lent money to the screenwriter and secured their debt with the rights to the screenplay had ties to narcotics activity. If the money lent in 2006 was drug money, then how would it be possible for Mr, Madrigal to claim that he was extorted?

The U.S. Attorney has assured me that they are unaware on any criminal activity by Mr. Madrigal and there is no evidence which suggests that drug money was invested in the film project.

The screenplay is not the film, these men have nothing to do with the film or its production and the suggestion of the headline, i.e. that the film or its production has drug ties is simply false and outrageous and will cause my client to be damaged in an amount in the hundreds of millions of dollars. The truth is that the screenwriter for the film borrowed money from someone who was extorted in order to obtain control of the screenplay. It is more than a stretch, rather it is an outright lie,to say that this chain of events means that the as yet unproduced film has drug ties.

If this is not done within 24 hours then we will take appropriate legal action against you. Please contact me immediately to discuss this. The foregoing is not meant to be a complete recitation of all of my clients rights and remedies all of which are expressly reserved

Re: Re: Re: Re:

Streisand Effect???

Dear Mr. Rosenthal,
Thank you for bringing this movie to the forefront again. I had originally forgotten about it, but now that I see what kind of jerk lawyers the producers employ, I'm making note of the film to ensure that neither I nor any of my family members watch the film.

Re: Streisand Effect???

For me, it wasn't that this Dick Rosenthal guy comes off as a d-bag, it's more that he comes off as unable to pass a second grade grammar test, and he's supposed to have gone to law school. If the outward most facing representatives of a company can't hide that they are idiots, than the inner members can't be any better....

Madre de Dio!

Er, how do you harm the reputation of a "money launderer for a Mexican drug cartel" - oh, doesn't matter because he's not the client.

If this is not done within 24 hours then we will take appropriate legal action against you.

Translation: I know we got no leg to stand on here, but my client's really upset and paying me (insert - e.g. $1,000) to write a letter. So to be clear, "appropriate legal action" in this context means, "We will do nothing." Which is actually appropriate, so it is a truthful statement that I am making.

Re: Re:

Ignore? You do know what that means I hope? Ignore means they pay no attention to it.

Mike writing up a full sized article about the 'legal' threat (in quotes because the grammatical, spelling and formatting errors, lack of Esquire and other important pieces of information leads me to believe this isn't real), does not fit the definition of ignoring it.

Re:

Re: Re:

You might be right. There are at least three sides to this fight though. The studio and the party they paid both have an interest in keeping any problems quiet until... forever. It makes sense that one of these stakeholders may be behind it.

This is probably a troll

Mike, it seems like this is just a troll. This email is so borderline semi-literate that I can't believe it was written by a lawyer -- one who doesn't specify his firm, append Esq. to his name, name the client and makes ... weird claims about communicating directly with the USAtty.

This smells of horsepoo.

Either that or we got a nominee for lawyer of the year at abovethelaw.

Re: Re: This is probably a troll

agreed...though he isn't representing the film (its not listed).

Mike...here's a troll test. Email your colleagues in the other news sites that covered this story...and see if they got an email as well...it'll almost certainly be copy-pasted except for the name of the site/paper receiving it.

Re: This is probably a troll

I'm not so sure. Aloe Entertainment claims to be represented by Attorney Rick Rosenthal on their website (link). This guy has the same phone number as one Richard Michael Rosenthal, who is actually licensed to practice law in California (link)

Re: This is probably a troll

If you want to see how unreadable and incomprehensible lawyers can be I present to you the following Cease & Desist from Howard Schechte of "Howard Roy Schechter Attorneys" in California [bit down the page]

with the best quote ever (other than "snort my taint") of “The rest of your letter relies on vague and bumptious legal threats buried amongst misspellings, bizarre malapropisms, misstatements of law and gibberish.”

It's a matter of titles.

The difference between a drug smuggler and the man who launders the money is massive. I would be insulted as well if I was an important accountant that was called mail guy. The difference between your positions is not only a major difference in authority but the increase in pay you make is a killing...

Re:

Ah yes, had to go with the "fat" insult didn't you?

And you wonder why people here think you and the ACs just like you are a joke and shills/trolls?

Besides, no offense, but I live right next to the border, as in we routinely have shootings/bodies turning up practically on our doorstep. Those Mexican drug cartels have one thing going for them, fear. The people who stand up to them and the people who aren't afraid to call their bluff, because that's what they usually are, bluffs, are the people who put fear into them.

This email up above, a part of me wouldn't be at all surprised if it was someone writing it on behalf of the cartel member. The local news stations/papers have all received similar emails as well as recordings, basically threatening them (not with legal action, but genuine threats in the form of actual physical harm). You know what they did, the news stations/papers that is? Kept on reporting the facts, including the threats. Know what happened? Not a damn thing.

But since you mentioned finding body armor, I wonder... can you find a clue? Or a backbone, Anonymous Coward/Troll?

Re: Re:

Jesus Christ, it was a joke already. If Masnick were intimidated by this jackass, whether a lawyer or not- I doubt he'd post the email here knowing the ridicule and derision it would receive and how further incensed the sender would be.

I have no idea what your babbling post was trying to convey. Did you just want to inform us that you live in a high crime area? Too bad; move. Or are you seriously suggesting the cartels sent Masnick a Google translation of a bogus legal threat? In which case you are a complete idiot.

Re: Re: Re:

Re: Re: Re:

It wasn't a joke. It was an insult. Said per the usual "hey chubby" and similar insults used by trolls.

My "babbling" was conveying that most of those drug cartels are all talk and are always threatening people who post anything relating to them. They've been known to have idiots send stuff on their behalf. I didn't say they sent Mike a Google translation of a bogus legal threat. I don't know how you got that from what I said. I think there's one complete idiot here. You.

If you were joking, make it more obvious. "Too bad; move." Geez, now you sound even more troll-like. "Oh, legal content isn't available in your country, that's not justification for piracy... to bad, move." Seriously, if you don't want people to reply to your stupidity, don't post such stupidity.

Re: Re: Re: Re: Re:

Re: Re: Re: Re: Re:

I say they've been known to have idiots do things on their behalf and you respond with that? You still aren't realizing that the idiot/dumb person here is you.

These organizations members aren't all rocket scientists. Some of them are idiots. Some of them have a thing about how they are perceived to the public. It is completely within the realm of possibility that someone sent the letter above as a terrible attempt to intimidate a website/news source to changing a part of the story to reflect the person in a slightly better manner. That it is a "libel threat" is irrelevant. I mean geez. Are you an idiot or do you just try to be one? If it had been an out and out letter stating "Mike, I am a drug cartel member. Change your story or you will be hurt." Would that have made you happy? Or better said, would that conform to your apparent belief/knowledge of how the Mexican drug cartels work?

I think we're done here. Obviously, the cartels aren't the only places idiots are found. Proof of that is apparent in the form of the person I'm bothering to reply to.

Its the drugs.

WTF?

I don't get this:

apparently Vazquez had Madrigal's brother kidnapped in Mexico, and demanded the rights to the screenplay in exchange for his release. Madrigal signed over the rights to the screenplay to Vazquez. Vazquez apparently then was able to sell the screenplay to Proud Mary Entertainment...

In what bizzaro world is a contract signed under duress legally binding anyway?

Re: WTF?

A world of EULA/TOS's? A world where content can be purchased, brought home, then we're told to accept terms written in some strange language no-one can understand. I consider it duress because not a single store would accept the content back, even if it was actually unused.

To: Richard Rosenthal

TO: Ima Buttkiss

SUBJECT: Response to defamation charges.

Hi Johnny, this is to inform you that someone played a very bad practical joke on you. They even mistyped your name and put Richard Rosenthal instead of your real name Ima Buttkiss. But do not fear, we know that your legal office, or maybe Microsoft Word 1987 spell check was to blame for this hideous, yet laughable attempt to communicate. We applaud your attempt to use modern technology and understand your difficulties. After all, your company has made a massive leap in technology advancement. Remember, just 2 weeks ago your office used 2x dixie cups and a really long string. Now you have a computer with 256 kilobytes of RAM... Awesome. Keep up the good work, and thanks for the laugh.

Re: To: Richard Rosenthal

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What is sought to be silenced will now receive wider publicity. What had passed without much hup-a-la is now back in the news and front page.

No better way to get a message out than complain about it. Or perhaps that is the point. I've heard off and on, through news reading that there is no bad publicity. Maybe that's what is being sought here, I'm not sure.

Smuggler vs. Trafficker

A drug trafficker sells or distributes drugs. A drug smuggler transports drugs across international boundaries into a country that has laws against the import of such drugs. A smuggler may be a trafficker, but frequently they are "mules" who are simply transporting the drugs for traffickers, and have no financial interest in their distribution and sales other than what they are paid for moving the product from point A in one country to point B in another.

What's curious here is that Rosenthal refers to his clients in first second and third person at various points in his friendly little note. Often, in the same sentence though that may not be the case because the syntax and punctuation is so bad that it's impossible to tell where one sentence really begins and if it ever really ends.

Re:

I think he is somehow trying to represent the film, that doesn't exist as yet, whilst trying to figure out how to incorporate some alleged defamation of one of the financial backers (who aren't his clients) and how there can be no ties between any of them including himself(???) and the movie with drugs - whilst also explaining about the actual ties with the money laundering that comes from drugs that the movie was originally backed with and how he cannot spell.